Condensed Consolidating Financial Statements

NPC’s obligations under the 10 1/2% Senior Notes due 2020 and its senior secured credit facilities are fully guaranteed by Holdings. As of the date hereof, Holdings’ only material asset is 100% of the stock of NPC. The remaining co-issuers with NPC, NPCQB and NPC Operating Company B, Inc. (“NPC Op Co B”) are 100% owned by NPC. NPC Op Co B does not have any assets or operations as of June 28, 2016 and has not had any revenues, expenses or cash flows during its existence. The Holdings and subsidiary guarantees are joint and several, full and unconditional. The following summarizes the Company’s condensed consolidating information as of June 28, 2016 and December 29, 2015, and for each of the 13-week and 26-week periods ended June 28, 2016 and June 30, 2015, respectively (in thousands):

Condensed Consolidating Statements of Income




	13 Weeks Ended June 28, 2016
	Parent		Subsidiary		Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	250,388	$	53,597		$	—	$	—		$	303,985
Total costs and expenses	—		241,750		49,485			—		—			291,235
Operating income	—		8,638		4,112			—		—			12,750
Interest expense	—		11,205		—			—		—			11,205
Equity in net income of subsidiary	1,271		4,367		—			—		(5,638		)	—
Income before income taxes	1,271		1,800		4,112			—		(5,638		)	1,545
Income tax expense (benefit)	—		529		(255		)	—		—			274
Net income	$	1,271	$	1,271	$	4,367		$	—	$	(5,638	)	$	1,271




	13 Weeks Ended June 30, 2015
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	253,911		$	52,325		$	—	$	—		$	306,236
Total costs and expenses	—		247,557			49,328			—		—			296,885
Operating income	—		6,354			2,997			—		—			9,351
Interest expense	—		10,492			—			—		—			10,492
Equity in net income of subsidiary	72		3,643			—			—		(3,715		)	—
(Loss) income before income taxes	72		(495		)	2,997			—		(3,715		)	(1,141		)
Income tax benefit	—		(567		)	(646		)	—		—			(1,213		)
Net income	$	72	$	72		$	3,643		$	—	$	(3,715	)	$	72



	26 Weeks Ended June 28, 2016
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	518,982		$	104,537		$	—	$	—		$	623,519
Total costs and expenses	—		495,107			97,895			—		—			593,002
Operating income	—		23,875			6,642			—		—			30,517
Interest expense	—		22,542			—			—		—			22,542
Equity in net income of subsidiary	8,930		7,332			—			—		(16,262		)	—
Income before income taxes	8,930		8,665			6,642			—		(16,262		)	7,975
Income tax benefit	—		(265		)	(690		)	—		—			(955		)
Net income	$	8,930	$	8,930		$	7,332		$	—	$	(16,262	)	$	8,930




	26 Weeks Ended June 30, 2015
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Total sales	$	—	$	514,478		$	100,966		$	—	$	—		$	615,444
Total costs and expenses	—		493,409			96,497			—		—			589,906
Operating income	—		21,069			4,469			—		—			25,538
Interest expense	—		20,957			—			—		—			20,957
Equity in net income of subsidiary	5,047		4,923			—			—		(9,970		)	—
Income before income taxes	5,047		5,035			4,469			—		(9,970		)	4,581
Income tax benefit	—		(12		)	(454		)	—		—			(466		)
Net income	$	5,047	$	5,047		$	4,923		$	—	$	(9,970	)	$	5,047

Condensed Consolidating Balance Sheet



	June 28, 2016
	Parent		Subsidiary		Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	77,028	$	1,920		$	—	$	—		$	78,948
Facilities and equipment, net	—		154,064		52,346			—		—			206,410
Franchise rights, net	—		569,079		42,799			—		—			611,878
Goodwill	—		290,502		4,124			—		—			294,626
Investment in subsidiary	282,619		78,073		—			—		(360,692		)	—
Other assets, net	—		26,433		1,568			—		—			28,001
Total assets	$	282,619	$	1,195,179	$	102,757		$	—	$	(360,692	)	$	1,219,863
Liabilities and member’s equity:
Current liabilities	$	—	$	93,951	$	16,571		$	—	$	—		$	110,522
Long-term debt	—		576,503		—			—		—			576,503
Other liabilities and deferred items	—		54,857		9,232			—		—			64,089
Deferred income taxes	—		187,249		(1,119		)	—		—			186,130
Member’s equity	282,619		282,619		78,073			—		(360,692		)	282,619
Total liabilities and member’s equity	$	282,619	$	1,195,179	$	102,757		$	—	$	(360,692	)	$	1,219,863



	December 29, 2015
	Parent		Subsidiary		Subsidiary		Subsidiary
	Guarantor: Holdings		Issuer: NPC		Co-Issuer: NPCQB		Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Assets:
Current assets	$	—	$	58,620	$	4,495	$	—	$	—		$	63,115
Facilities and equipment, net	—		155,501		47,967		—		—			203,468
Franchise rights, net	—		577,097		43,421		—		—			620,518
Goodwill	—		290,502		4,124		—		—			294,626
Investment in subsidiary	273,689		76,784		—		—		(350,473		)	—
Other assets, net	—		27,233		1,736		—		—			28,969
Total assets	$	273,689	$	1,185,737	$	101,743	$	—	$	(350,473	)	$	1,210,696
Liabilities and member’s equity:
Current liabilities	$	—	$	91,472	$	16,724	$	—	$	—		$	108,196
Long-term debt	—		577,011		—		—		—			577,011
Other liabilities and deferred items	—		55,589		6,448		—		—			62,037
Deferred income taxes	—		187,976		1,787		—		—			189,763
Member’s equity	273,689		273,689		76,784		—		(350,473		)	273,689
Total liabilities and member’s equity	$	273,689	$	1,185,737	$	101,743	$	—	$	(350,473	)	$	1,210,696

Condensed Consolidating Statements of Cash Flows



	26 Weeks Ended June 28, 2016
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Operating activities:
Net cash flows provided by operating activities	$	—	$	38,283		$	14,060		$	—	$	—		$	52,343
Investing activities:
Capital expenditures	—		(18,948		)	(6,445		)	—		—			(25,393		)
Return of investment in subsidiary	—		6,043			—			—		(6,043		)	—
Acquisition of Wendy’s business, net of cash acquired	—		—			(7,963		)	—		—			(7,963		)
Proceeds from sale-leaseback transactions	—		828			6,327			—		—			7,155
Proceeds from sale or disposition of assets	—		887			60			—		—			947
Net cash flows used in investing activities	—		(11,190		)	(8,021		)	—		(6,043		)	(25,254		)
Financing activities:
Net payments on debt	—		(4,326		)	—			—		—			(4,326		)
Distribution to parent	—		—			(6,043		)	—		6,043			—
Net cash flows used in financing activities	—		(4,326		)	(6,043		)	—		6,043			(4,326		)
Net change in cash and cash equivalents	—		22,767			(4		)	—		—			22,763
Beginning cash and cash equivalents	—		31,918			799			—		—			32,717
Ending cash and cash equivalents	$	—	$	54,685		$	795		$	—	$	—		$	55,480



	26 Weeks Ended June 30, 2015
	Parent		Subsidiary			Subsidiary			Subsidiary
	Guarantor: Holdings		Issuer: NPC			Co-Issuer: NPCQB			Co-Issuer: NPC Op Co B		Eliminations			Consolidated
Operating activities:
Net cash flows provided by operating activities	$	—	$	37,079		$	11,970		$	—	$	—		$	49,049
Investing activities:
Capital expenditures	—		(20,214		)	(6,252		)	—		—			(26,466		)
Return of investment in subsidiary	—		5,713			—			—		(5,713		)	—
Proceeds from sale-leaseback transactions	—		1,408			—			—		—			1,408
Proceeds from sale or disposition of assets	—		499			49			—		—			548
Net cash flows used in investing activities	—		(12,594		)	(6,203		)	—		(5,713		)	(24,510		)
Financing activities:
Net payments on debt	—		(3,119		)	—			—		—			(3,119		)
Distribution to parent	—		—			(5,713		)	—		5,713			—
Net cash flows used in financing activities	—		(3,119		)	(5,713		)	—		5,713			(3,119		)
Net change in cash and cash equivalents	—		21,366			54			—		—			21,420
Beginning cash and cash equivalents	—		11,278			785			—		—			12,063
Ending cash and cash equivalents	$	—	$	32,644		$	839		$	—	$	—		$	33,483